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Precision Castparts Settles Investors’ Suit

Jan. 12, 2021
The aerospace parts manufacturer reportedly will pay $21 million over a class action by investors who claim the 2016 sale to Berkshire Hathaway devalued the holding.

Precision Castparts Corp., a Berkshire Hathaway holding, reportedly will pay $21 million to settle a class-action suit brought by investors who contend that the aerospace component manufacturer’s sale to the Warren Buffet’s Berkshire Hathaway portfolio undervalued the business.

In 2016, Berkshire Hathaway paid $37 billion for Portland, OR-based Precision Castparts.

In summer 2020, Berkshire Hathaway Inc. took a $9.8-billion writedown on PCC, which now is among dozens of manufacturers struggling collapsed demand in the commercial aerospace market. It also implemented extensive downsizing, reducing total employment by 30%, or about 10,000.

Precision Castparts has three divisions: Investment Cast Products, including PCC Structurals and PCC Airfoils; Forged Products, including Wyman-Gordon, PCC Energy Group, Titanium Metals Corp. (TIMET), and Special Metals Corp. (SMC); and Airframe Products, including PCC Fasteners and PCC Aerostructures. While it is heavily focused on aerospace manufacturing, it also supplies energy and industrial markets.

The settlement with investors has yet to be approved by the U.S. District Court in Portland. If it is approved, the court then will set payment details.